Only 28% of landlords are confident that over the next five years, renting out property will remain financially viable.
Research by LegalforLandlords asked 544 UK landlords about their Budget expectations, concerns and the measures they want the Chancellor to introduce.
When asked about the upcoming Autumn Budget, 59% said they were pessimistic about the announcements.
If taxes rise further, 40% say they would increase rents.
Costs and landlord confidence
Sim Sekhon, the firm’s chief executive, said: “Landlords are running businesses and making long-term investment decisions.
“If the cost of providing rental housing continues to rise, some will look to increase rents where they can, while others may decide that remaining in the sector is no longer financially viable.”
He added: “The government needs to consider the impact of any additional measures on the supply of rental homes.
“Improving the financial viability of being a landlord, alongside addressing the costs of compliance and regulation, could help support confidence and encourage landlords to remain in the market.”
Landlords weigh up selling
Asked how they would respond to a higher tax burden, 18% would consider selling their properties, while 16% said they would leave the sector.
Capital gains tax topped the list of Budget concerns, with 22% identifying a potential rise as their biggest worry.
For another 20%, their big issue was income tax on their rental income.
The potential cost of the government’s energy efficiency upgrades also featured, with 18% putting it first.
Tax relief tops requests
Reducing income tax on rent income was the most popular choice when respondents were asked what would improve confidence, attracting support from 30%.
Lower CGT was favoured by 27%.
Meanwhile, 17% called for mortgage interest tax relief to be introduced.
In a separate question about increasing private rented home supply, a quarter said landlord tax relief would boost investment.
Other landlord priorities
Beyond tax relief, respondents identified two other priorities for increasing the number of homes available to let.
They are reducing the cost of compliance and regulation and building more social homes.
Each option was supported by 15% of surveyed landlords.
Those favouring more social housing wanted the government to prioritise construction rather than put more financial pressure on landlords.
Measures to boost tenant affordability attracted less support as a way of increasing supply, with 7% choosing that answer.
Mr Sekhon said: “The Autumn Budget is an opportunity to provide greater certainty for the sector.
“Policies that support a sustainable private rented sector will be important for landlords, tenants and the wider housing market.”
Student landlord Budget worries
The managing director of Accommodation for Students, Simon Thompson, said: “For me, this research raises a practical question: does keeping each property justify its costs?
“Higher taxes would mean reviewing income, borrowing and future spending before deciding whether ownership remains worthwhile.”
He added: “I do think that one landlord’s intentions about selling or remaining in the PRS cannot determine everyone’s choice.
“Also, any proposed rent increase needs careful thought about tenant affordability.”
